In this episode of the Investing for Beginners podcast, the hosts delve into four primary methods to value a stock: Price to Earnings (P/E) ratio, Price to Sales (P/S) ratio, Price to Free Cash Flow (P/FCF) ratio, and Return on Equity (ROE).

They begin with an in-depth discussion of the PE ratio, explaining its calculation, significance, and limitations while also providing examples from various industries. They then move on to the PS ratio, highlighting its utility for early-stage growth companies and its limitations. For Price to Free Cash Flow, they detail the calculation process and explain why this metric might be more volatile but useful for valuing a company's cash-generating efficiency. Finally, they explore ROE, emphasizing its importance in assessing a company's profitability relative to shareholder equity and the potential pitfalls associated with debt manipulation.

This episode is packed with valuable insights and practical examples to help beginners better understand stock valuation metrics.

Link to 4 Ways to Value a Stock Infographic

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00:00 Introduction to Stock Valuation

00:22 Understanding the PE Ratio

03:18 Industry-Specific PE Ratios

05:36 Limitations of the PE Ratio

10:24 Introduction to the PS Ratio

11:13 Using the PS Ratio for Growth Companies

13:47 Introduction to Price to Free Cash Flow

16:10 Calculating Free Cash Flow

23:54 Introduction to Return on Equity

24:44 Buffett's Approach to ROE

29:34 Potential Pitfalls of ROE

30:43 Conclusion and Q&A

Today's show is sponsored by:

Go to SHOPIFY.COM/beginners to start selling with Shopify today.

Go to shipsticks.com and use the code INVESTING for 20% off.

Go to get.stash.com/INVESTING to see how you can receive $25 towards your first stock purchase and to view important disclosures.

This episode is sponsored by BetterHelp. Give online therapy a try at betterhelp.com/INVESTING and get on your way to being your best self.

What do Dave and Andrew recommend? Our free ebook and email series, at stockmarketpdf.com.

Find great investments & Connect, Learn and Grow at Value Spotlight

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Wall Street incentives are all jacked up, and after 25 years of experience poring through countless financial statements, David Trainer has an easy and automated solution for improving the transparency of the capital markets.

The problem with financial statements today are that the details are in the footnotes, and these details are not captured in earnings reports or price earnings ratios. Investors who don’t read the footnotes and aren’t always getting the complete picture of a company's story, and corporate America is incentivized to continue to obfuscate it.

The fact of the matter is that too little attention is being paid to whether companies are creating or destroying value with their growth and it’s leading to too many investors losing money by speculating on bad businesses. If more investors took the time to fully understand and analyze ROIC and economic earnings, they would be better able to allocate capital towards businesses that actually have the best long-term prospects.

If things change with the new administration and the speculative excesses of the last few years start to dissipate, then we could see a reset in the capital markets-- with the return of undervalued and profitable businesses generating better returns than speculative growth ones.

This episode is jampacked with many of David Trainer's personal stories and insights, including why he founded New Constructs and the purpose behind it, which is to Improve the Integrity of the Capital Markets.

It’s a mission that’s sorely needed and that we fully stand behind. Share this episode with others so this movement can spread.

00:00 Introduction and Guest Welcome

00:33 Earnings Season Insights

02:31 Understanding Economic Earnings

05:21 The Importance of Return on Invested Capital

08:04 Market Speculation and Liquidity

19:36 Footnotes and Financial Obfuscation

26:07 Emergency Brake Protocols and Missing Disclosures

26:34 Challenges with Operating Leases

27:41 The Role of Estimator Code

27:56 Regulatory Bodies and Enforcement Issues

31:39 Conflicts of Interest on Wall Street

35:32 The Birth of New Constructs

40:23 Technological Advancements in Data Collection

46:52 Upcoming Live Stream and Platform Demo

50:36 Conclusion and Final Thoughts

Timestamps are generated by artificial intelligence, and are not 100% accurate depending on the platform used for listening.

Today's show is sponsored by:

Go to SHOPIFY.COM/beginners to start selling with Shopify today.

Go to shipsticks.com and use the code INVESTING for 20% off.

Go to get.stash.com/INVESTING to see how you can receive $25 towards your first stock purchase and to view important disclosures

This episode is sponsored by BetterHelp. Give online therapy a try at betterhelp.com/INVESTING and get on your way to being your best self.

What do Dave and Andrew recommend? Our free ebook and email series, at stockmarketpdf.com.

Find great investments & Connect, Learn and Grow at Value Spotlight

Have questions? Send them to [email protected]

SUBSCRIBE TO THE SHOW

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In this episode of the Investing for Beginners podcast, Andrew and Dave address a thought-provoking question from Reddit about value investing and discuss how market overreactions and narratives affect stock prices.

They delve into the relevance of Warren Buffett's early strategies, the impact of cyclical forces, and the dynamics of unloved companies gaining popularity. The conversation explores examples from different sectors, emphasizing the importance of understanding businesses over reacting to market news.

The episode highlights the challenges and rewards of value investing, stressing the need for patience and awareness of market narratives.

00:00 Welcome to Investing for Beginners

00:15 Understanding Value Investing with Warren Buffett

00:42 Market Emotions and Overreactions

01:47 The Impact of News on Market Perception

02:55 Challenges of Predicting Market Movements

05:51 Cyclical Forces and Business Fortunes

08:14 Case Studies: Home Builders and Semiconductors

24:24 Echo Chambers and Market Narratives

30:37 Final Thoughts and Wrap Up

Today's show is sponsored by:

Go to SHOPIFY.COM/beginners to start selling with Shopify today.

Go to shipsticks.com and use the code INVESTING for 20% off.

Go to get.stash.com/INVESTING to see how you can receive $25 towards your first stock purchase and to view important disclosures.

What do Dave and Andrew recommend? Our free ebook and email series, at stockmarketpdf.com.

Find great investments & Connect, Learn and Grow at Value Spotlight

Have questions? Send them to [email protected]

SUBSCRIBE TO THE SHOW

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In this episode of the Investing for Beginners podcast, the hosts provide a comprehensive look at Uber Technologies as an investment opportunity. The discussion includes personal experiences using Uber, the company's current financial status, and a deep dive into the company's growth stage and stock dilution practices. The conversation touches on the challenges and risks Uber faces, including competition from other ride-sharing apps, regulatory hurdles, and potential impacts of autonomous vehicles. This episode also emphasizes the importance of following financial statements and considering various viewpoints to make informed investment decisions.

00:00 Introduction to the Podcast

00:05 Exploring Uber Technologies

00:30 Personal Experiences with Uber

01:31 Investment Considerations for Uber

02:42 Financial Analysis of Uber

09:49 Risks and Challenges for Uber

14:42 Community Insights and Final Thoughts

27:57 Encouragement for Aspiring Investors

29:43 Conclusion and Contact Information

Today's show is sponsored by:

Go to SHOPIFY.COM/beginners to start selling with Shopify today.

Go to shipsticks.com and use the code INVESTING for 20% off.

What do Dave and Andrew recommend? Our free ebook and email series, at stockmarketpdf.com.

Find great investments & Connect, Learn and Grow at Value Spotlight

Have questions? Send them to [email protected]

SUBSCRIBE TO THE SHOW

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In this episode of the Investing for Beginners podcast, the hosts delve into the intricacies of the cash conversion cycle (CCC), an important metric for evaluating how quickly a company converts cash into inventory and back into cash.

They break down key accounting terms like cash, inventory, accounts payable, and accounts receivable, and discuss how these elements are interrelated.

By examining real-life examples such as Costco, Amazon, and Walmart, the hosts illustrate how the CCC can highlight a company's operational efficiency and potential red flags.

They also touch on differences in business practices and how these reflect on financial metrics, highlighting the importance of cash flow for company stability and growth.

00:00 Welcome to Investing for Beginners

00:10 Understanding the Cash Conversion Cycle

00:37 Breaking Down Key Accounting Terms

01:51 The Importance of Cash Flow

03:38 Accounts Receivable and Payable Explained

05:34 Visualizing Financial Relationships

09:02 Formulas and Financial Metrics

12:23 Real-World Examples and Applications

25:33 Fun with Accounting and Hot Dogs

27:28 Conclusion and Listener Engagement

Today’s show is sponsored by:

Go to SHOPIFY.COM/beginners to start selling with Shopify today.

What do Dave and Andrew recommend? Our free ebook and email series, at stockmarketpdf.com.

Find great investments & Connect, Learn and Grow at Value Spotlight

Have questions? Send them to [email protected]

SUBSCRIBE TO THE SHOW

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Join us for an insightful discussion with TJ Terwilliger from Compounding Dividends, as we dive deep into dividend investing strategies. Learn why smart investors choose dividend stocks, how to analyze dividend-paying companies and discover expert tips for building long-term wealth through dividend investing.

Today's show is sponsored by:

Go to SHOPIFY.COM/beginners to start selling with Shopify today.

Learn more from TJ here:

X: @tj_terwilliger

X: @CompoundingW

Compounding Dividends

Find great investments at Value Spotlight

Have questions? Send them to [email protected]

Learn how the stock market works with our 7 Steps ebook and series.

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Join us for an in-depth analysis of Union Pacific Corporation, one of America's largest railroad companies. We'll examine their financial performance, market position, and investment potential while breaking down key metrics that matter to investors. Discover if this transportation giant deserves a place in your portfolio.

Today's show is sponsored by:

Go to SHOPIFY.COM/beginners to start selling with Shopify today.

Find great investments at Value Spotlight

Have questions? Send them to [email protected]

Learn how the stock market works with our 7 Steps ebook and series.

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Dive into the foundational principles of value investing as taught by legendary investors Warren Buffett and Benjamin Graham. This episode explores their revolutionary approach to viewing stocks as businesses, utilizing market volatility to your advantage, and implementing margin of safety - concepts that remain crucial for investment success even today.

• 00:00:34 - Introduction to Warren Buffett and Ben Graham's principles

• 00:01:23 - How these investors revolutionized stock market approach

• 00:02:23 - Real-world examples of successful investment strategies

• 00:03:25 - Understanding the importance of viewing stocks as businesses

• 00:16:15 - Leveraging market volatility for investment opportunities

• 00:27:02 - Exploring the concept of margin of safety

• 00:32:43 - Practical tips for implementing value investing strategies

• 00:37:29 - Final thoughts on applying Buffett's investment principles

Today's show is sponsored by:

Go to SHOPIFY.COM/beginners to start selling with Shopify today.

Find great investments at Value Spotlight

Have questions? Send them to [email protected]

Start learning how the stock market works with our 7 Steps ebook and series.

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Discover the secrets of successful portfolio management as we dive deep into sector concentration, diversification strategies, and risk management. Whether you're a beginner or experienced investor, learn how to structure your portfolio using the four-quarter approach while avoiding common mistakes that could cost you significant returns.

[0:00] Introduction to sector concentration and portfolio management discussion

[2:15] Warren Buffett's concentration strategy vs average investor approach

[5:30] Four-quarter portfolio diversification strategy explained

[8:45] Sector categorization and theme-based investing approach

[12:20] Portfolio evolution and adaptation over time

[15:40] Managing position sizing and portfolio growth

[18:30] New investor considerations for portfolio construction

[22:15] Expert insights on concentration vs diversification debate

Today's show is sponsored by:

Go to SHOPIFY.COM/beginners to start selling with Shopify today.

Find great investments at Value Spotlight

Have questions? Send them to [email protected]

Learn how the stock market works with our 7 Steps ebook and series.

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Join Andrew and Dave in this insightful episode as they explore the art of expanding your circle of competence. Discover practical methods to master new skills, from coding to investing, and learn how to overcome the fear of learning. Perfect for beginners eager to grow their knowledge and confidence.

Today's show is sponsored by:

Go to SHOPIFY.COM/beginners to start selling with Shopify today.

Find great investments at Value Spotlight

Have questions? Send them to [email protected]

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You can find the transcript of today's show below:

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